The federal government has expanded its Home Affordable Refinance program to include more Americans who originally were ineligible because they were too far upside down in their homes.

The first incarnation of the program only applied to those who were 105% upside down. But now that limit has been raised to 125% of a home's current value.

The government is doing this to give an incentive to hang in there to struggling homeowners. Mortgage rates have dropped recently to about 5.35% on 30-year loans and 4.85% on 15-year loans. (Editor's note: Rates accurate as of June 30, 2009.)

Speaking of 15-year loans, there's a special new incentive from the feds. Under the new rules, the government will cover much of your closing costs if you shorten the length of your loan and go for a 15-year note.

Clark says this is a real triple threat -- in the good sense. First, you have the expanded opportunity to refinance. Second, you have the incentive to go into a 15-year loan, which automatically has a lower rate. Third, you have the feds absorbing some of your closing costs on a 15-year refi.

It's win, win, win.

Why would the feds work extra hard to get you to shorten the length of your loan? You start hitting more of your principal from the start on a 15-year mortgage, which ultimately lowers the risk to taxpayers.

Yet there's a lot of resentment from people who have been able to pay their mortgages. They wonder why we are paying to subsidize those who are drowning.

Clark's response? You're missing the bigger picture. Stopping foreclosures helps preserve everyone's property values -- including yours.

One caveat: In order to take advantage of the new expanded mortgage bailout, your loan must be owned by either Fannie Mae or Freddie Mac. See instructions on how to determine if you qualify.